Ganga, Yamuna are partners sharing profits and losses in 3:2 respectively. Their position on 31. 3. 2013.

Ganga, Yamuna are partners sharing profits and losses in 3:2 respectively.

Their position on 31. 3. 2013.  [10 Marks]

Balance sheet as on 31.03.2013

Liabilities	Amount	Assets	Amount
Capital A/c		Building	100000
Ganga	100000	Furniture	10000
Yamuna	75000	Stock	31000
Creditors	10000	Debtors  50000
Bills Payable	5000	Less: R.D.D.  -1000	49000
General Reserve	15000	Bank	15000
	205000		205000

On 1st April, 2013, they admitted Saraswati on the following terms:

(1) Saraswati should bring in cash Rs. 1,00,000 as capital for 1/5 share in future profit and Rs. 25,000, as goodwill.

(2) Building should be revalued for Rs. 1,25,000.

(3) Depreciate Furniture at 12 1/2 % p.a. And stock at 10%.

(4) R.D.D. should be maintained as it is.

(5) The capital accounts of partners should be adjusted in their new profit sharing ratio through bank account.

Prepare: (1) Profit and loss adjustment account. (2) Capital Account. (3) Balance sheet of new firm.

Solution: In the books of the Ganga, Yamuna and Saraswati.

Profit and Loss Adjustment Account.

Particulars	Amount	Amount	Particulars	Amount	Amount
To Furniture A/c		1250	By Building A/c		25000
To Stock A/c		3100
To Profit on Revaluation Transferred to Partnes Capital A/c
Ganga’s Capital A/c	12390
Yamuna’s Capital A/c	8260	20650
		25000			25000

Partners’ Capital A/c

Particulars	Ganga	Yamuna	Saraswati	Particulars	Ganga	Yamuna	Saraswati
				By Balance b/d	100000	75000
				By General Reserve A/c	9000	6000
				By Bank A/c	-	-	100000
				By Goodwill A/c	15000	10000	-
				By P/L Adj. A/c	12390	8260	-
To Balance C/d	240000	160000	100000	By Bank A/c	103610	60740
	240000	16000	100000		24000	16000	100000

Balance Sheet as on 1st April, 2013.

Liabilities	Amount	Amount	Assets	Amount	Amount
Capitals:			Building	100000
Ganga	240000		Add: Appreciation	25000	125000
Yamuna	160000		Furniture	10000
Saraswati	100000	500000	Less: Depreciation	1250	8750
Creditors		10000	Stock	31000
Bills Payable		5000	Less: Written off	3100	27900
			Debtors	50000
			Less: R.D.D.	1000	49000
			Bank		304350
		515000			515000